A Preemptive Times Strike

Frank Blethen announces $21 million in cuts. For a start.

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(Photo: Alice Wheeler)

Again, the guy is a master of timing. Just as we're reporting on his pessimistic year-end memo to Seattle Times employees, publisher Frank Blethen apparently knew that the board of the Pacific Northwest Newspaper Guild was due to meet on Tuesday. So what better day to preemptively announce how he'd carve $21 million out of the paper's budget? (Here's the Tuesday memo announcing 86 job cuts.) Just to, you know, help focus the minds of union reps on the task at hand.

Was the guild surprised at the timing of the memo? "Not really," says spokeswoman Liz Brown. Did it seem strategic, almost a provocation? She pauses, looking for the bright side. "Well, it helped us, because it boosted turnout at the meeting." Already, she adds, the PNWG has scheduled a meeting with Times management for January 24, intending to discuss procedures for the planned layoffs (which, thus far, won't affect the newsroom).

Let's review Blethen's math. His December memo said management had identified "reductions of about $21 million. We still need another $6 million to ensure stability next year [i.e. this year, 2008]. But, even a $27 million cost reduction leaves a significant gap with the revenue losses." This is to offset print revenue losses that he estimated at $33 million for 2007 and 2008.

So the first shoe ($21 million) has dropped months before the Times contract with the guild expires in July. The second shoe ($6 million) may then fall--certainly with Blethen's encouragement--before new negotiations even begin. As Brown has admitted, buyouts are unlikely. Old-timers are leaving the newsroom already, without incentives. Meaning Blethen may get his $6 million even before new contract talks begin (likely around May).

But Blethen's "gap" may not stop there. Nor would further cuts.

The Times is a private company, and can do its accounting any way it likes. In the past, according to Brown, it has shown the PNWG at least some of its books--one reason the guild agreed to a two-year wage freeze in 2006. And, presumably, it shares fuller information with 49.5 percent minority owner McClatchy Newspapers.

In the past, however, its JOA partner Hearst--which owns the P-I--has basically accused Blethen of cooking the books to keep the company in the red, that being a strategy to escape the JOA. Even though that agreement has been extended to 2016, Blethen can continue to shed unionized staff through attrition (and flat to minimal wage increases), while hiring more on the non-union side of Seattle Times Co., including its successful Web site, NWsource.

Times spokeswoman Jill Mackie earlier declined to detail whether it was adding more or less ad reps on the unionized print side of the paper compared to the NWsource side. All newswriters are in the PNWG, but not those genius NWsource staffers who pen shopping blog items like ?How to Buy Lingerie for Your Valentine.?

What's Blethen's incentive to running a business just under the profit line? Basically to deny Hearst its 40 percent of revenues mandated by the JOA. Thus, if more PNWG members retire, if the paper's Web site continues to thrive, if ad revenues on the print side recover somewhat (particularly in real estate), Blethen's "gap" could turn positive. Which he could easily then negate by upgrading his printing plant, expanding Web operations, or hiring individual helper monkeys to go fetch coffee and donuts. (And those monkeys don't come cheap!)

And here's the unkindest cut of all: According to its own reporting, the Times will follow the example of several other major papers--including The Wall Street Journal--by reducing its trim size by an inch in 2009.